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Dubai, the shining gem of the United Arab Emirates, is famous for being a business hotspot. The ROI for commercial real estate here ranges from 4% to 8% YoY. The city attracts entrepreneurs and investors from all across the world. Investing in commercial real estate in the free zones of Dubai is like getting a pie in the sky. It opens doors of possibilities because of the tax exemptions and ownership patterns. In this post, we will tell you why investing in the free zones of Dubai can be a wise choice, as well as how to get started.
What is a Free Zone?
Economic areas or regions where goods and services can be traded are known as free zone, aka free trade zones. These areas attract zero tax rates, better customs duty rates as well as full tax exemption on both imports and export, making it a desirable location among businesses that use it for manufacturing or distribution. It also attracts foreign investments because of its 100% foreign ownership rights. This allows foreigners to set up their businesses in these areas without a local partner or sponsor.
Also, in free zones, business owners are given “leasehold” ownership, unlike freehold ownership, where you get complete, perpetual ownership. A free zone is made to attract foreign investment, create job opportunities, promote import and export as well, and boost the economy altogether. These areas have their own set of regulations and limitations. It is usually situated separately from the domestic areas.
Top 5 The Free Zone Areas in Dubai
- Jebel Ali Free Zone (JAFZA)
Dubai Internet City (DIC)
Dubai Healthcare City (DHCC)
Dubai Media City (DMC)
Dubai Multi Commodities Centre (DMCC)
Dubai has many free zone areas, and the following are some of the prominent ones:
Jebel Ali Free Zone (JAFZA)
Businesses in this area specifically focus on trade and logistics. You will find companies from the manufacturing, distribution and service sectors. It is one of the largest and oldest free zone areas of Dubai and is directly connected to the biggest port in the region.
Dubai Internet City (DIC)
This area has mostly IT or information technology and telecommunications companies. It provides a vibrant ecosystem for tech startups as well as established firms.
Dubai Healthcare City (DHCC)
DHCC is a free zone dedicated to healthcare and medical services. You will find hospitals, clinics, research centres, and medical education facilities in this area.
Dubai Media City (DMC)
In this free zone region, you will find companies dedicated to media and communication. It has advertising, broadcasting, publishing, as well as digital media firms.
Dubai Multi Commodities Centre (DMCC)
The leading and fastest-growing free zone area of Dubai. It is dedicated to the commodities trade. You will find companies involved in precious metals, diamonds, and other commodities.
Should You Setup Your Business in Free Zones of Dubai?
Now that you have a grip on what is a free zone area and learnt about some of the top regions, the question is, why should you set up your business in one of them?
Setting up a business is easier said than done, but when it comes to commercial real estate in the free zones of Dubai, it is indeed easier. Starting your business in Dubai free zone can actually prove to be a golden opportunity because of its economic advantages.
Here are a few reasons why you should consider investing in the free zones of Dubai:
- Businesses in free zones get customs duty exemptions, which helps in cost-saving while trading.
- Free zones have tax benefits in corporate income tax and zero personal income tax for employees.
- 100% foreign ownership is allowed.
- Complete recovery of capital investments.
- The setup process is easy. Streamlined registration and licensing procedures, allowing faster operations.
- Investor-friendly regulations and a supportive environment for entrepreneurs.
- Free zones offer high-tech facilities with modern infrastructures in offices, warehouses and logistic centres.
- Free zones are often strategically located often located near major seaports and international airports, enhancing logistics efficiency and easy connectivity, encouraging access to global trade markets.
- Helps build a strong business community, as investors and entrepreneurs from all across the world have the opportunity to participate and collaborate.
- Free zones have strict copyright laws, which provide intellectual property protection.
- Free zones have no currency restrictions. Businesses can trade using any currency they want without any currency exchange restrictions.
- Provides unmatched privacy. Businesses and investors are offered complete confidentiality, and every sensitive information is protected with utmost care.
- In most free zones, any minimum capital investment is not compulsory, making it accessible for startups.
- Easy and convenient import and export procedures, allowing smoother international trade.
- Provides a stable business environment.
How to Setup Your Business in Free Zones of Dubai?
Setting up your business in the free trade zones is a piece of cake. While the process may vary as per the area you choose but here’s a guide to help you get started:
Step 1:Come Up with a Business Plan
Figure out what you want to do. Outline your objectives, target market, finances, and how you can grow in the industry. Make a full-proof business plan and strategy. This is very crucial as it will be needed during your registration process.
Step 2: Research and Choose the Right Free Zone That Suits Your Needs
Research all the free zone areas. Find out the one that aligns with your business objectives.
Step 3:Legal Structure and Name
Find out the naming guidelines of the free zone areas and decide on a unique name for your company, whether it’s a startup or a new branch of your existing business. Also, make sure the legal structure of your business is also well-thought-out.
Step 4:Register Your Company
Submit all the necessary documents (application form, business plan, passport copies of shareholders and directors) and fees. Get your company registered.
Step 5:Apply for a License
Apply for the required licenses, such as trade, service, industrial, consulting or e-commerce, to start your operations.
Step 6: Select Your Office Space and Infrastructure
Understand what you want your office space to look like and start searching for suitable space within the free zone areas.
Step 7: Employment and Visas
Research the employee guidelines of free zones. Get your work permits and visa (if you’re considering foreign workers).
Step 8: Compliance and Regulations
One of the most important tasks is to learn about the rules and regulations. Get familiar with the compliance and regulatory tasks, including reporting, annual audits, license renewals etc.
Step 9:Seek Professional Advice
Get in touch with a pro to navigate the complexities and fix any hardships easily. Consult with our team of experts from Top Luxury Property for a smoother process of getting your perfect space in the free zones of Dubai.
Conclusion
Commercial real estate in the free zones of Dubai is the gateway to success for many aspiring entrepreneurs and investors. With tax-free policies, foreign ownership patterns and an easy registration process, Dubai has become the leading business hub of the world. The economic advantages and investor-friendly environment of Dubai have made it an ideal choice for commercial real estate buyers and investors.
